Innogy's renewables EBIT goes down 6.7% in H1

Zuidwester wind farm. Image by innogy.com.

August 10 (Renewables Now) - The renewables division of German energy company Innogy SE (ETR:IGY) has experienced a 6.7% year-on-year drop in adjusted EBIT to EUR 167 million (USD 191.5m) in the first half of 2018.

The company blamed the weaker earnings before interest and tax (EBIT) result on lower income from solar photovoltaic (PV) engineering, procurement and construction (EPC) contracts and negative volume effects, which were partially compensated by positive price effects and the contribution from new assets.

External revenues at the renewables segment inched up to EUR 456 million from EUR 455 million as power generation increased slightly to 4.8 TWh from 4.7 TWh, with 77% coming from onshore and offshore wind farms. Weather-related factors have resulted in lower utilisation of existing plants, but this has been overcompensated by the commissioning of new assets, Innogy said. Its total renewables capacity amounted to 3,571 MW at the end of June, up from 3,487 MW a year back.

On a group level, Innogy posted a 4% rise in attributable net profit to EUR 850 million, with the adjusted result going down 22.8% to EUR 662 million. Adjusted EBIT declined by 10% to EUR 1.55 billion. The company explained the lower bottom line with the non-recurrence of positive one-off effects in 2017 in Retail in Germany as well as with an unexpected commodity price increase arising from the cold weather in the Netherlands.

“Overall, business performance in the first half of the year was in line with our expectations, which are reflected in our outlook for 2018. We therefore confirm our outlook for the current fiscal year both for Group and segment levels,” said CFO Bernhard Guenther.

Innogy guides for adjusted EBIT of about EUR 2.7 billion and adjusted net profit of over EUR 1.1 billion for the full year 2018.

The company’s capital expenditure in January-June 2018 climbed by 36% on the year to about EUR 900 million and Renewables accounted for EUR 178 million of that. The company’s green investments mainly focused on onshore wind projects in Italy, the US and onshore and offshore wind projects in the UK.

In late July, German energy group E.on SE (ETR:EOAN) built an 86.2% stake in Innogy. This includes the 76.8% interest it previously agreed to buy from RWE AG (ETR:RWE) and the result of a voluntary tender offer for minorities that was completed last month. The transaction is still subject to receipt of official approvals and the buyer does not expect it to close before mid-2019.

As part of a complex transaction agreed in March E.on is looking to sell its major renewable energy operations, including Innogy’s own renewables business, to RWE.